Transcript LIGUE DES CADETS DE L’AIR DU CANADA

AIR CADET LEAGUE
of Canada
Financial Training Course
(June 2013)
FINANCIAL TRAINING
TODAY’S LESSONS
Introduction Aims
Presentation of the training course
and objectives
Purpose
of the Treasurer
Section
1: Basic accounting notions
Section
2: Budget
Section
3: Bookkeeping
Section
4: Annual Financial Statement– ACC9
Section
5: GST, Provincial taxes
Section
6: Registered Charity Information
Return (Federal T-3010B (09),
Provincial TP-985.22)
Section
7: Practical information and schedule
Section
8: Additional Resources
Aims and Objectives of the Training Course
Respond to an actual need for volunteers
Clarify the purpose of the treasurer within the organization and
define expectations
Provide simple working methods and tools
Ensure continuity of the activities in favor of young cadets
Ensure succession in the Squadron
Facilitate access to the Treasurer position
Standardize management of accounting information within the
Squadrons
PROCESS MAP OF THE SPONSORING
COMMITTEE
EXECUTIVE
COMMITTEE
CHAIR
1ST VICE-CHAIR
2ND VICE-CHAIR
SECRETARY
TREASURER
DIRECTOR
DIRECTOR
DIRECTOR
DIRECTOR
DIRECTOR
 Function of the Treasurer
1.
Record on a monthly basis, money entries and disbursements in the subledger, according to the chart of account
2.
Put audit controls for each financing activity in place (maximize revenues
and minimize losses)
3.
Submit financial statements (revenues and expenses) as well as the bank
reconciliation
4.
File bills
5.
Ensure a rigorous follow-up on cash to be received from DND (CDT 135)
 Function of the Treasurer (continued)
6.
Inform semi-annually to the Chair of the important budget variances and
suggest alternatives
7.
Prepare annually the budget in collaboration with the Chair and the
Commanding Officer
8.
Maintain the inventory of the goods belonging to the Squadron up-to-date
9.
Prepare the (ACC-9) report and submit it within the period specified
10. Complete the different governmental reports (GST, QST, T-3010,
TP-985.22) and submit them within the period specified
11. Emit receipts for charitable contributions for taxation purposes

Selection criteria for the position of treasurer:
1.
Attention to detail
2.
Methodical
3.
Rigorous in tasks to complete
4.
Discreet – confidential information
5.
Trusted
Pre-requisites:
1.
Be confident with numbers
2.
The treasurer must not have had a personal bankruptcy
3.
Have a good reputation in the community
Section 1: Basic notions on accounting
A.Accrual accounting:
A purchase will be entered in an account when the merchandise is received
even if the payment is only due later. The counterpart of the expense coming from
this purchase will be an account to be settled. The account to be settled will only be
cancelled once the payment has been done. This way of accounting is much more
precise since at the end of the month or the year it takes all the revenues and charges
into account even if these have not been cashed or disbursed
B.Cash basis:
Transactions are accounted for based on the entries and outgoings from
the bank account. Revenues and expenses are only accounted for when they are
cashed or disbursed. This accounting system is simple and has the advantage of
being easy to follow.
Terminology
Statement of income: Accounting report which resumes the financial situation of an
entity during its financial year. The totality of the revenues and expenses are presented
here. The exceeding amount of the revenues on the expenses is a profit (loss).
Financial year: Period of time between July 1st and June 30th of the next year
Balance sheet: State of the financial situation on a given date. The balance sheet presents
the whole of the assets (what one possesses) and of the liabilities (what one owes). The
total of the assets must always balance with the total of the liabilities.
General ledger: Represents the whole of the accounting accounts used by the entity (see
ACC-9 for more details)
Sub-ledger: Revenue journal « revenue » (cash inflow) and journal of the « Expenses»
(disbursements)
Terminology (continued)
Petty cash: Sum of money serving to pay certain expenses such as stationery,
stamps, etc… The petty cash must be regularly reconciled and must appear in the
balance sheet in the end of the financial year. Each expense must be supported by
a receipt.
The petty cash is optional, depending on operational needs of the Squadron.
(Buying office supplies, availability of the subscribers, etc.)
Inventory: Register in which one writes the whole of the Squadron’s goods. This
register must contain the date of procurement of a good, a brief description, the
serial number and the amount paid.
Section 2: Budget
General:
The budget must be prepared in conjunction with the Chair and the Commanding
Officer of the Squadron and should be presented to the personnel as well as the
parents of the cadets during the parents’ meeting scheduled in the fall of each year.
The budget is a tool, a guide, in which projects are presented as are the ways the
funds collected will be spent. It serves as a map that indicates the trip for the year
ahead.
To reach our objectives …. We need a plan…
The BUDGET is the solution !
DESCRIPTION OF THE BUDGET PROCEDURE
Determination of the objectives (recruiting objective, cadet
retention activities, material purchases, etc)
Chair and Commanding Officer
Acceptation of the common
objectives
June - July
Preparation of the cadet activities program
(sending the program to the RCSU (East) begining of
September)
Commanding Officer and Training
Officer (Inform the President)
June – July - August
Preparation of the financing activities (L’Auto-Cadet lottery,
packaging, car wash, etc.)
Chair and Executive committee
and/or Directors (Inform the
Commanding Officer)
June – July - August
Make the budget of mandatory activities (DND) following
guidelines for the activities Plan emitted by the RCSU (East)
(before called ATD)
Commanding Officer and Officers
July - August
Make the budget of optional activities and financial
obligations of the Squadron (occupation fees)
Chair and Treasurer
July - August
Mix the two budgets (civil and military) and final
adjustments. Adoption of the budget during session
Chair, Commanding Officer,
Treasurer
August - September
Preparation of the presentation to the personnel, parents,
and senior cadets
Chair and Commanding Officer
September
Application of the budget and implementation of the
activities
All
September to June
Revision of the budget (identification of the anomalies and
finding solutions for them)
Chair and Commanding Officer
January
Sources of information for the preparation of the annual budget
1.
2.
Financial statement of the previous financial year (ACC-9)
a)
Identification of the source for funds (financing activities)
b)
Identification of the expenses of funds (cadet activities)
Annual Operation Directive (AOD) emitted by RCSU (EAST)
(http://www.cadets.ca/regions/est/content-contenu.aspx?id=60712&terms=aod)
Specifies the yardsticks that will be used by RCSU (East) (Regional support
Cadet Unit – Eastern Region) for the re-imbursement of the expenses related
to the cadet activities (mandatory and optional)
3.
Effective strength for the year
a)
The effective strength is the fundamental element on which certain
revenues and expenses are based (i.e.: L’Auto-Cadet, summer camp,
military personnel, yardstick for re-imbursement)
4.
5.
Local activities program
a)
Allows to identify periods of the year when the Squadron’s activities will take
place
b)
Identification of the needs for resources (material, financial and human)
Bank statement and Bank reconciliation
a)
6.
Allows to know the sum of money that will serve to cover certain expenses
before the first financing activities begin.
Identification of the flexibility (cash flow) essential to the smooth functioning of the
Squadron’s activities. Fixing a cash flow budget on a monthly basis that permits to
identify at which moment during the year are previewed the income and outgoings
of funds (ex: financing campaigns from September to December and the majority of
expenses happen between January to June)
Section 3: Bookkeeping
Accounting of the accounts entry according to the cash accounting
1st step:
Familiarize oneself with the chart of account used for the ACC-9 and add
particularities specific to the Squadron.
2nd step:
Account all revenues and expenses regularly in the corresponding accountable
accounts of the auxiliary books (Revenues sub-ledger or the Expenses subledger of the ACC-9)
INTERNAL CONTROL
TWO (2) MAIN OBJECTIVES:
Minimize losses:
Protect the Squadron’s goods (lock, inventory)
List of cadet names (name, address, telephone)
Maximize revenues:
Plan, organize an control the different financing activities
(Identification of the need in material human and financial resources)
a) DISBURSMENTS
All payments done by the Squadron must correspond to the following criteria:
• Be accompanied of a bill
• The good or service must have been pre-authorized by the
Commanding Officer and/or the Chair
• The expense must be planned in the budget
• All payments must be done by check and must be counter-signed by
two authorized signatories by the sponsoring committee (Chair and/or
the Treasurer and the vice-chair). The signatories must not be related (i.e.:
spouses)
• Have the required funds available at the moment of payment (never do
a check with insufficient funds (NSF)).
INTERNAL CONTROL
b) CASH INFLOW
Since most of the cash inflows are done with cash, it is important to put in
place a system of internal control that, while being simple to put into
practice, insures a minimum of internal control and discourages tentative
for embezzlement.

Practical examples for Squadrons:

Cadet Lottery
duration: ~6 months (September to ?)

Packaging
duration: 4 days (Thursday to Sunday)

Tagging
duration: twice a year ?

Canteen
duration: during the whole year
Fundraising campaign L’Auto-Cadet Lottery
This financial resource being common to all, it is important to reduce the losses
that can happen during the few months in which the campaign lasts.
i.
Have the cadets sign when the tickets are handed to them
Recommendation: For recruits, only allow 10 tickets at once in the
objective of reducing losses to a minimum
ii.
Transmit a letter to parents giving them information concerning the
financing campaign and to sensitize them to the cause
iii. When cadets hand in the money for their tickets, they must endorse
this by putting their initials on the control document
Tagging:
This activity normally lasts a week-end and has the advantage of being
of short duration at the same time as revenues are maximized.
i.
Ensure yourself to have a sufficient amount of cadets and of
supporting personnel (military or civil) to ensure service at each
working period
ii.
Cumulate donations after each shift and keep an accounting up to
date for the activity (for statistic purposes)
iii. Possibility of selling back the money (coin rolls) to the commerce at
the end of the activity
iv. Always have multiple people handling the money. Transparency!
v.
Make a deposit in the shortest delays possible. If possible, make a
deposit each day to avoid robbery or losses
DEMANDS FROM THE MILITARY PARTNER
Follow-up on requests for refunds (CDT 135):
The military partner demands that requests for refunds be submitted on a
specific form called CDT 135.
• The treasurer completes this form and sends it to the Commanding
Officer.
• The government requires that this form be accompanied by original
documents (*) and must mention that they are paid (balance is at zero,
copy of both sides of the check).
• You must keep a copy on file of all the documents that will be submitted
to the RCSU (East).
The delay for refunding is about 45 days. The Squadron must pay this charge
before being refunded.
The management for the cash flow of the treasury takes here all its importance.
(*) including the numbers for GST, QST
Section 3: Bookkeeping (continued)
• Other elements to be considered:
•The sponsoring committee cannot engage the Squadron towards financial
obligations that exceed a (1) year. (ie: lease, contract of equipment rental –
photocopier rental, etc)
•The mandate if the sponsoring committee is renewable each year during
elections (June)
The Annual Financial Report– ACC-9
The ACC-9 is a financial report system designed using Excel
that can meet ALL of your Squadron’s financial reporting
needs through out the year. It includes:
• Journals for both expenses and revenues
• Monthly financial report capability
• Budget tracking and budget estimations
• Yearly financial report
• Produces the financial numbers for the Revenue Canada
Registered Charity Report (T3010-1)
• Calculates both the GST rebate and Provincial Tax rebate
(if applicable – registered charities only)
•Sample
There are now 3 versions of the ACC-9 to use.
Which one is right for you?

Multi Bank Account version (acc9mv14.0.xls)


Single Bank Account version (acc9sv14.0.xls)


for SSCs that operate with two or more bank accounts.
for SSCs that operate with only one bank account
Paper Version (acc9p_e.pdf)

for SSCs that prefer to use another accounting program and just fill
in the yearly report.
Annual Financial Report– ACC-9
Website of the Air Cadet League of Canada (National)
http://www.aircadetleague.com/
Website of the Air Cadet League of Canada (Quebec and Ottawa Valley)
http://qc.liguedescadetsdelair.ca/
Website of the Ottawa Valley ACL
http://ottawavalleyacl.com
Section 5: GST and Provincial Taxes
General Rules
• Most of the sales are exonerated (non-taxable),
• You can demand a partial refund (50%) of the GST that you have paid
for purchases and admissible expenses
• Provincial Office must submit a GST-10 form that gives permission
for a Squadron to claim a GST rebate
•For Provinces with HST, you may be able to claim back part of the
provincial tax portion of the HST (RC7066-SCH)
• For example, in Ontario, Squadrons can claim 82% of the
Provincial portion of taxes paid.
Example: Squadron total HST paid for the year: $2000
GST Rebate: #384.62
Provincial Rebate: $1009.23
Admissible Expenses:
General fees
Certain
of exploitation (rent, public services, administration fees)
allocations and refunds paid to employees or voluntaries
Goods or
services bought that are used, consummated or furnished for
your exonerated activities
Non- Admissible Expenses:
Alcoholic beverages and
tobacco products
GST Refund:
Can
go back up to 4 years to claim rebate
Frequency:
Should be done Annual at year-end
Forms:
GST ; FPZ - 66 (first time), GST-284 sent by CRA after that.
QST ; VDZ – 387
Provincial Rebate:
Can
go back to when HST came into effect
Section 6: Registered Charity Information Return
(Federal T-3010, Provincial TP-985.22 (Quebec Only))
As a Registered Charity, you have an obligation of producing an
annual declaration (federal and provincial) at the latest 6 months
following the end of the fiscal year.
If you do not produce this declaration in a timely manner, CRA can
revoke your charity status. The consequences can be:
• you can’t give out charitable donation receipts
• a fine of 500$ to get your status reinstated
• loss of all of your funds if a revocation audit is done
 The ACC-9 automatically calculates all of the financial section
numbers for the T3010.
Official Charitable Donations Receipts
•Must carry
•Receipt
•Name
the mention "Official Receipt for Income Tax Purposes"
must be numbered (sequential order)
and address of the Squadron (As it is written in the record)
•Registry number
(ex: 123613523RRxxxx)
•Date
of reception of the donation (day or year of reception of donation)
•Total
amount received by the charitable organization
•The
name and address of the donor
•Place
and date where the receipt was delivered
•Authorized signature (Chair, Treasurer)
•Link
to access the Site of the Canada Revenue Agency
(http://www.cra-arc.gc.ca/tx/chrts/menu-eng.html)
www.cra.gc.ca/charities
www.cra-arc.gc.ca/chrts-gvng/chrts/pbs/rcpts-eng.html#sample1
http://fr.nebs.ca/onlinestore/20071116001/handwritten-forms/receipt-
books/non-profit-receipts/p-13496-c-10907222.htm
Record and Conservation Keeping - Fiscal

Damaged receipts must be kept with their duplicate and bear the mention
"CANCELLED"

If a receipt must be replaced, the new receipt must bear the mention
"REPLACED", followed by the serial number of the replacing receipt
 A copy
(duplicate) of the receipts for tax purposes must be kept with the
governmental reports (federal and provincial)
 The
registries from the Squadron and the conviction pieces of the
information that they contain must be kept in the eventuality of a verification.
Section 7: Useful Information and Calendar
Calendar of the Treasurer
June– July – August:
Payment of the received bills during the summer season and ensuring that no
account is overdue to the furnishers.
Finalize account entries for the end of the fiscal year
Reconcile the petty cash of the Commanding Officer
Registering the accounts entry (bank statement)
Preparation of the budget (see schedule – Section 2)
Plan the research of sponsors and plan subventions
Handing in the ACC-9 to the League Head-Quarters (August 31st)
September:
Approbation of the annual budget and preparation of the budget presentation
Send the demands for refunds for the GST and QST
October:
Registering account entries (bank statement) for the monthly meeting
(Chair – Commanding Officer)
Putting the Squadron’s inventory of the goods up-to-date
November:
Registering account entries (bank statement) for the monthly meeting
(President – Commanding Officer)
15th of November  First hand-out of the l’Auto-Cadet Lottery
December:
Registering account entries (bank statement) for the monthly meeting
(President – Commanding Officer)
Deadline for cash inflows relative to charity donations (December 31st)
Conciliation of the petty cash
Inventory of the cadet’s cafeteria
December 31st  Deadline for mailing in of T-3010 form and sending of the
Charitable Donations Receipts to donors (for fiscal purposes)
January:
Registering account entries (bank statement) for the monthly meeting
(President – Commanding Officer)
*** Revision of the annual budget ***
2nd hand-out of the L’Auto-Cadet Lottery
Do a post-mortem of the financing campaigns and do a report to the
committee on proposed improvements
February:
Registering account entries (bank statement) for the monthly meeting
(President – Commanding Officer)
Beginning February  Finalization of the campaign of L’Auto-Cadet
Lottery
March:
Registering account entries (bank statement) for the monthly meeting
(President – Commanding Officer)
Ensure all the refunding bills have been handed in to the Commanding
Officer going to the RCSU (East) (Cdt 135) (keep a copy on file for your
records)
Put your financial forecast until the end of the calendar up-to-date.
Review expenses relative to the Annual Review as well as the year end
trip (if applicable)
April:
Registering account entries (bank statement) for the monthly meeting
(President – Commanding Officer)
Review stocks rotation of the cafeteria. Maintain purchases to a
minimum (stay away from merchandise loss)
May:
Registering account entries (bank statement) for the monthly meeting
(President – Commanding Officer)
Maintain a control over expenses. The volume of transactions tends to
increase during this very busy part of the year.
Update regularly financial forecast

Section 8: Additional Resources
Website: http://ottawavalleyacl.com
Training Videos:
http://ottawavalleyacl.com/ovacl/acc-9.php
Select English Training Videos
Email: [email protected]
CONCLUSION
A JOB WORTH DOING
…..
IS WORTH DOING WELL!